UPDATE: JP Morgan Downgrades Choice Hotels International to Underweight

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JP Morgan has published a research report on Choice Hotels International
CHH
and has downgraded the company from Neutral to Underweight. In the report, JP Morgan writes, "We are lowering our rating on CHH to Underweight from Neutral. Our year-end 2012 price target goes to $31 from $34, implying 16% downside from current levels, and assumes CHH can trade at 10x 2012E EV/EBITDA by year end. Since CHH reported 3Q11 earnings in late October, its shares are up 7.4%, outperforming the sector and the S&P 500 by 680 bps and 740 bps, respectively. For the full year 2011, CHH has meaningfully outperformed the average of its lodging C-Corp peers by some 1400 bps. We believe investors have been ‘hiding out' in CHH given its defensive, largely domestic (and limited direct Europe/Asian exposure), sturdy franchise model, but believe this perceived safe characteristic has largely played out in its valuation." JP Morgan has also lowered the price target from $34 to $31 on Choice Hotels International, which is currently trading down $0.53 from yesterday's $37.74 closing price.
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Posted In: Analyst ColorDowngradesPrice TargetIntraday UpdateAnalyst RatingsJP Morgan
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